As Online Learning Grows, So Will Proctors. Case in Point: Examity’s...


As Online Learning Grows, So Will Proctors. Case in Point: Examity’s $90M Deal

By Tony Wan     Apr 30, 2019

As Online Learning Grows, So Will Proctors. Case in Point: Examity’s $90M Deal

Tests these days start by making students prove not what they know, but who they are. Historically that involves bringing some form physical identification, but increasingly companies and institutions are turning to face recognition, fingerprinting and voice biometrics.

Such are the tools developed and offered by Examity, a provider of exam proctoring tools used by colleges and universities, assessment groups, professional certification boards and employers. The Boston-based company passed its own test of sorts today: securing a $90 million investment from private equity firm Great Hill Partners. As a result of the transaction, Great Hill will own a majority stake in the company.

Examity offers a menu of live and automated proctoring services. So far, says Examity’s founder and CEO Michael London, customers opt for fully-automated products for low-stakes quizzes and tests, and a mix of human-and-tech approaches for high-stakes exams.

London was formerly CEO of Bloomberg Institute, an education startup affiliated with the media company that developed a test to evaluate candidates on their financial knowledge. That test is no longer around, but he says that experience inspired him to launch Examity in 2013.

Today, more than 75 percent of Examity’s 500-plus customers are colleges and universities, including Indiana University and Texas A&M. It claims a smaller, but growing footprint among employers at corporations, including Amazon. Online education companies, including Coursera and Duolingo, also use Examity to verify the identities of students who earn certificates.

The company is also eyeing big-name standardized test providers as they start to deliver digital versions of traditional paper exams. Among them is The College Board, which has approved Examity as a remote proctor for the Accuplacer exam, a computer-adaptive test used to assess students’ readiness for introductory college courses. Kaplan also uses Examity for its nursing test-prep services.

Examity’s identity verification technologies include facial recognition analysis that checks whether a test-taker’s face resembles that of the picture on their ID card. It can also use biometric keystroke technology to track patterns in how people type, which the company claims can be unique to each individual.

Once an online test begins, the user’s computer camera can flag suspicious activities, such as odd head or eye movements, for a human proctor to check. The company employs an India-based team of 500 human proctors who work around the clock, and each of whom are assigned to no more than three students at once. All testing sessions can also be recorded, should the institution choose.

London acknowledges that no standalone proctoring technology is foolproof nor immune to false red flags. Nor will these tools ever fully replace human proctors, who are still best able to make calls on edge cases. For example, a test-taker’s child may run into the room during a session, which technically violates exam rules but is generally excusable. In such a scenario, “we have technology that works behind the scenes, and that information is shown to a proctor, who will make a judgment call” if the system detects anything fishy, says London.

Some students have complained to college administrators that having someone peer into their dorm or home environments can feel invasive. And the degree to which personally identifiable information is collected may worry others. According to London, all data collected during a test session is encrypted and stored on the company’s own servers. In most cases, he claims, information is deleted within 30 days.

Examity offers its tools on a pay-per-test model or an annual subscription that allows customers to use Examity to proctor an unlimited number of tests. On average, a higher-ed institution will spend about $50,000 per year, says London, although that pricing can vary widely depending on the institution’s size.

London says Examity is currently profitable and cashflow positive, with paying customers from its beginning. The company expects to grow its headcount—from its 100 full-time U.S. staff—alongside its business as more and more students take online courses. According to Babson Survey Research Group, nearly 32 percent of higher-ed students took an online course in 2016—a figure that has increased for 14 consecutive years.

“One of the enabling technologies in the shift to online education is being able to authenticate that the student is doing the work and mastering the skills,” says Troy Williams, managing partner at University Ventures. “The value of online credentials only exists with this technology in place.”

University Ventures is a previous investor in Examity, and sold the majority of its stake as a result of this deal. “We’re very happy with our returns,” Williams noted. To date, Examity has raised just shy of $120 million in investment capital.

Examity’s ambition to capture the growing market for proctors will not go uncontested. Other providers of similar services include ProctorU, Proctorio, PearsonVUE and Krypterion. According to Tyton Partners, an investment banking and advisory firm focused on the education sector, the market for online proctoring services will reach $4.2 billion in the U.S. and $19 billion globally in 2019.

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